The Reserve Bank of India has plans to introduce 100 crore polymer notes valued at Rs. 10 each to increase the lifespan of the notes and combat fake notes.
RBI plans to introduce the notes initially in 5 cities of the country as portion of pilot study. The matter was informed by RBI Governor, D. Subbarao at the Foundation Stone laying ceremony for the Bank Note Paper Mill at Mysore. He said, “This pilot experiment has been taken up as part of the cost and longevity program of the RBI’s currency management; after consultation with the Union government”.
The polymer notes have already been tested by developed nations like Canada and Australia.
The notes will be environment friendly. The Governor said. “Considering the relatively long life of polymer notes and their amenability to re-cycling, the ‘carbon footprint’ of polymer notes vis-à-vis paper banknotes is likely to be on the plus side. Regardless, this is one of the issues that we will study during the pilot phase, and will embark on polymer notes on a long-term basis only if the cost-benefit calculus is decidedly positive in all dimensions”.
India will be printing about 17 billion units of paper currency this year. Manufacturing our own paper is comparatively cheaper, and precaution to prevent faking, he said. India’s requirment for banknote paper – 18000 MT annually – is big in international terms, and there are just 3/4 major suppliers. Mr. Subbarao said, “This situation exposes us to vulnerabilities of a suppliers market in terms of price, quantity and timelines, something that we should avoid or minimize”.
He also said that big nations like the US, Japan, China, Brazil, Russia and European nations and also smaller nations like South Korea, Indonesia, Iran and Pakistan manufacture their own bank note paper.
Talking about the number of counterfeit notes found out in India every year, he said, “By an international metric, the incidence of counterfeit notes in India is not alarming.”